Incoterms vs UCC - confused about which governs my equipment financing collateral description

Incoterms and UCC are totally different things that serve different purposes. Incoterms deal with international shipping terms and who's responsible for what during transport - like FOB, CIF, DDP etc. UCC Article 9 governs how you perfect security interests in personal property. For your UCC-1 filing, you don't need to reference the incoterms at all. Just describe the equipment clearly - make, model, serial numbers if you have them.

I had the same confusion last year! The key thing to understand is incoterms determine delivery terms and risk allocation between buyer and seller. UCC determines how to properly perfect a security interest once you own the collateral. For your collateral description, focus on clearly identifying the specific equipment - 'Manufacturing Equipment' might be too vague. Be more specific about what type of manufacturing equipment.

Just went through this exact issue with imported equipment from Italy. Spent way too much time trying to figure out if DDP terms affected my UCC filing (they don't). What helped me was using Certana.ai's document checker - I uploaded my purchase agreement and the draft UCC-1 and it flagged that I was mixing up commercial terms with security interest requirements. Saved me from filing something confusing.

The confusion makes sense because both involve 'terms' but they're governing completely different aspects of the transaction. Think of it this way: incoterms govern the SALE of goods, UCC governs the SECURITY INTEREST in goods. Two separate legal relationships. Your FOB Hamburg term determined when risk of loss passed from seller to you during shipping. Your UCC-1 filing creates a security interest in favor of your lender now that you own the equipment.

One thing to watch out for - make sure your equipment actually made it through customs and you have clear title before filing the UCC-1. I've seen situations where goods got held up and the security interest filing was premature because the debtor didn't actually own the collateral yet.

Just to add another perspective - while incoterms don't affect your UCC filing directly, they might affect the timing of when you can file. Like if you're using DDP terms, you don't get title until delivery, so you can't grant a valid security interest until then. But once you have title, the original shipping terms are irrelevant to the UCC filing.

For what it's worth, I think a lot of this confusion comes from lawyers who handle both international trade and secured transactions using similar-sounding language. But you're dealing with two different areas of law that just happen to both involve commercial transactions.

Here's what I tell people: incoterms = shipping rules, UCC = lending rules. They can both apply to the same transaction but they're answering different legal questions. Your UCC-1 should focus on clearly identifying the collateral according to UCC Article 9 requirements, not referencing how you acquired it.

Actually tried that Certana thing mentioned earlier after seeing this thread. Pretty slick - uploaded my equipment purchase docs and UCC draft and it immediately spotted that I was overthinking the collateral description. Confirmed that incoterms references weren't needed and suggested cleaner language. Worth checking out if you're doing complex equipment financing.

Bottom line - don't overcomplicate your UCC-1 filing by bringing in concepts from the underlying purchase transaction. The security interest exists independently of how you acquired the collateral. Focus on clear collateral identification and proper debtor naming. That's what matters for perfection.

This thread perfectly illustrates why so many people get tripped up on international equipment deals! I've been doing UCC filings for 15 years and still see experienced attorneys mixing these up. The key insight that helped me early on was realizing that incoterms are about the SALE relationship (buyer-seller), while UCC is about the CREDIT relationship (borrower-lender). They're completely separate legal frameworks that just happen to involve the same physical assets. For your $180K equipment, stick to standard UCC collateral description practices - be specific about the machinery type, include serial numbers if available, and don't reference how you acquired it. The FOB Hamburg terms served their purpose during the international sale but have zero relevance to your security interest perfection.